Metavante, Fidelity deal in works for months; IPC reviews Validus offer; Cox investors bank on higher bid

By Cristal Cody

Tupelo, Miss., April 1 - Shares of Metavante Technologies, Inc. jumped $1.96, or 9.82%, to close at $21.92 on Wednesday after Jacksonville, Fla.-based Fidelity National Information Services, Inc. made an all-stock offer to acquire the company for about $2.94 billion.

The deal is valued at $4.4 billion with the assumption of Milwaukee-based Metavante's debt and has been in the works for months, company executives said Wednesday.

In other deals, IPC Holdings, Ltd.'s board of directors plans to review the offer made by Validus Holdings, Ltd. but said the company is bound by the terms of its agreement to acquire Max Capital Group Ltd.

Though executives could not elaborate further in an interview with Prospect News, it was hinted that details wouldn't be long in coming.

"No doubt we will have the opportunity to talk again soon," John Weale, chief financial officer of IPC Holdings, told Prospect News.

Meanwhile, investors continue to trade shares of Cox Radio, Inc. above a $69.1 million offer made by Cox Enterprises, Inc. to take the company private.

Moving to action on Wall Street Wednesday, investors staged a midweek rally that sent the Dow Jones Industrial Average up 152.68 points, or 2.01%, to close at 7,761.60.

The broader indexes also rose, and the Standard & Poor's 500 index crept back up above 800.

The S&P 500 added 13.21 points, or 1.66%, to end at 811.21, while the Nasdaq Composite index gained 23.01 points, or 1.51%, to close at 1,551.60.

Banking services consolidate

A combination had been discussed behind the scenes at Metavante and Fidelity National for months, according to executives.

"Each company spent well over a year looking at their strategic position [independently]," Lee Kennedy, Fidelity's president and chief executive officer, said on Wednesday's conference call with analysts.

"It started with a conversation I had with Frank [Martire, Metavante's chairman and CEO], where we said 'hey we ought to take a look at the two companies and see whether there was something that might happen that would create stronger value for our shareholders.' We were not up for sale."

Martire said on the call that the company was not looking for a transaction but "we think this combination is a great win for our shareholders."

Metavante's stock has traded from $11.50 to $26.50 over the past year.

Under the terms of the deal, Metavante shareholders will receive 1.35 shares of Fidelity National's stock for each share of Metavante.

Fidelity National shares slid $1.32, or 7.25%, to close at $16.88 on Wednesday. The stock is down from a 52-week high of $42.16.

The two companies provide processing transaction and banking and payment services to the top 200 banks in the United States.

Several analysts said on the conference call that the acquisition sounds like a good business combination, but they declined to immediately comment on the deal.

The acquisition includes a $175 million breakup fee and is subject to approval from shareholders of both companies and regulatory clearances, according to the companies.

The transaction is expected to close in the third quarter.

IPC reviews terms

Bermuda-based reinsurance and insurance provider Validus offered on Tuesday to buy IPC for $1.68 billion in an all-stock deal.

Under the terms, each IPC share would be exchanged for 1.2037 Validus shares.

The offer values IPC at $29.98 a share and represents an 18.00% premium based on the company's closing stock price on Monday.

Analysts told Prospect News that IPC instead is likely to push to continue its $912 million stock acquisition of Max Capital, a specialty insurer and re-insurer.

The Bermuda-based companies planned to combine to provide global specialty insurance and reinsurance services.

IPC's stock added 44 cents, or 1.63%, to close Wednesday at $27.48, while Max Capital shares rose 56 cents, or 3.25%, to end at $17.80.

Shares of Validus closed at $23.91, up 23 cents, or 0.97%.

Cox stock rises

Cox Radio's stock closed up 2 cents, or 0.49%, at $4.12 on Wednesday, above the $3.80-a-share offer made on March 23.

Cox Radio's board said in a statement Wednesday that it has formed a special committee of independent directors to consider the tender offer.

The buyout offer represents a 15.20% premium over the stock's closing price the day before the bid was made. Shares have traded from $2.90 to $13.09 over the past year.

The committee plans to release its position by Friday and urges shareholders to take no action with the offer.

Cox Enterprise's tender offer expires on April 17. The media company already owns a 78% interest in Cox Radio and holds a 97% voting interest. Both companies are based in Atlanta.

Mentioned in this article:

Cox Radio, Inc. NYSE: CXR

Fidelity National Information Services, Inc. NYSE: FIS

IPC Holdings, Ltd. Nasdaq: IPCR

Max Capital Group Ltd. Nasdaq: MXGL

Metavante Technologies, Inc. NYSE: MV

Validus Holdings, Ltd. NYSE: VR

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